Last Updated on 26/12/2019 by Deepak Singla
The financial services sector is one of the most booming economic areas in Singapore. This is largely attributed to the regulations passed by the Singaporean government that allows for the incorporation of the latest technological trends in the financial sector. As a result, many entrepreneurs want to set up businesses in this sector.
Favorable regulations for doing business, especially in the financial services industry, has been one of the major reasons why Singapore is one of the biggest investment hubs for entrepreneurs. Financial technology (FinTech) has received great support from the Monetary Authority of Singapore with investments in excess of $225 million being made in the sector.
There are existing laws in Singapore that you have to comply with if you intend to start a business in any industry or sector. In this article, we will give you a comprehensive guide on how you can start a business in the financial services sector.
Legislation on companies in the financial sector
Trading licenses in the financial services sector are provided by the Monetary Authority of Singapore (MAS). Concerning legislation, the finance ministry of Singapore provides guidelines that companies in the finance industry should follow strictly. There are several types of businesses that you can start in the financial sector, and depending on nature, the following laws have to be strictly adhered to:
- The Monetary Authority of Singapore act: This act spells out all of the procedures that must be followed when starting a banking business in Singapore.
- The Banking law: This spells out the regulations that all banking institutions must adhere to.
- The Securities, Future, Trust Companies, and Financial Advisers Acts: These acts provide the requirements for opening business that will be listed in the capital markets of Singapore.
- The Insurance Act: This act provides all of the requirements needed for setting up an insurance institution in Singapore.
- The Anti-Money Laundering Act: This act provides all of the activities that companies in the financial sector should do to tackle money laundering.
Before starting a business in Singapore, it is important to first consult local experts on the required procedures and legal requirements for that specific business. If you are a foreigner, you have to apply for a Singapore visa before you even think of starting a business. You can get help applying for your visa online at the One Visa website.
Companies in the financial sector of Singapore
Companies operating in this industry are regulated by the Finance Companies Act of Singapore. The majority of these companies provide savings and fixed deposit accounts to Singaporean citizens. At the same time, financial companies advance credit facilities to Singapore citizens and other corporations. These companies are not allowed to operate in foreign currency or even gold. You can only expand the scope of your activities if your request to the MAS is accepted.
Types of financial companies you can start in Singapore
There are numerous options of financial companies you can start in Singapore. They include banks, brokerage companies, insurance firms, investment firms, and FinTech companies. Legislations supporting the financial technology sector have made sectors like cryptocurrency trading very popular in Singapore. If you want to start a business in the FinTech area, you can apply for various special licenses that can help you efficiently execute your operations.
How to register a financial business in Singapore
Before setting up a financial company, you must meet all of the company law requirements. This means that the business must have at least one shareholder, one director, and a company secretary. There are various consultants in Singapore who can assist you with setting up a company and explain to you the legal requirements and implications. If you are a foreigner, you are first advised to seek the services of a consultant.
Licenses you can apply for
If you intend to start a business in the financial services sector, you can either apply for the capital markets license or financial advisors license. Both of these licenses regulate a range of activities including asset management, investment services, and property fund management. It is important to consult a qualified expert before applying for either of these licenses.
Is it advisable to start a business in the finance sector in Singapore?
The finance sector of Singapore is one of the best-performing economic sectors in the country. As of 2019, there were more than 200 financial institutions being supervised by the MAS. The primary reason why the financial sector is booming is because of the various schemes by the government aimed at attracting investors to invest in the finance industry.
The legislation in Singapore does not bar foreign investors from investing in the country. Statistics show that out of all the banking institutions in Singapore, only four of them are local while the remaining are foreign banks.
Singapore is one of the largest and most thriving economic hubs in the South East Asia region. The finance sector is the best performing of all and the government is committed to ensuring that the sector is even propelled to greater heights. This is evident with the regulations that have been passed to allow the incorporation of modern finance technology. If you want to start a business in Singapore, the financial services business can be a great option.